ORIGINAL ARTICLE The Effect of the Introduction of a Case-MixBased Funding Model of Rehabilitation for Severe Stroke: An Australian Experience Kim A. Brock, PhD, Stephen J. Vale, MPhysio, MBus, Susan M. Cotton, PhD ABSTRACT. Brock KA, Vale SJ, Cotton SM. The effect of the introduction of a case-mix– based funding model of reha- bilitation for severe stroke: an Australian experience. Arch Phys Med Rehabil 2007;88:827-32. Objective: To compare resource use of, and outcomes for, rehabilitation for severe stroke before and after the implemen- tation of the Casemix and Rehabilitation Funding Tree case- mix-based funding model. Design: Prospective, observational cohort study. Setting: Eight inpatient rehabilitation centers in Australia. Participants: Consecutive sample of 609 patients with se- vere stroke. Interventions: Not applicable. Main Outcome Measures: Rehabilitation length of stay (LOS), discharge destination, and FIM instrument motor score at discharge. Results: The average rehabilitation LOS changed signifi- cantly between the preimplementation year and the implemen- tation year (Mann-Whitney U, P=.001). There were no signif- icant differences in discharge destination. FIM motor score at discharge showed significant reduction in improvement (Mann- Whitney U, P=.001) between the preimplementation year and the implementation year. There were no significant correlations between LOS in rehabilitation and gain in function for either the preimplementation year (Spearman , P=.07) or the im- plementation year (P=.15). Conclusions: The change in funding model was associated with a decrease in inpatient costs and with an associated increase in disability at discharge. Our results suggest that the rate of improvement in severe stroke is variable; also, they support the use of funding models for stroke rehabilitation that allow flexibility in resource allocation. Key Words: Rehabilitation; Stroke; Treatment outcome. © 2007 by the American Congress of Rehabilitation Medi- cine and the American Academy of Physical Medicine and Rehabilitation T HE INTRODUCTION OF case-mix– based funding to health care in Australia has been a major focus for the last 15 years. The Australian health care system provides free hospital care for all Australians. The purpose in introducing case-mix-based funding was to reimburse hospitals more fairly through a system that allocates higher levels of payment for the more complex and difficult cases. 1 In rehabilitation, case-mix-based funding has been viewed as a way to achieve greater efficiency and equity in allocation of resources. 2 Rehabilitation presents specific challenges to the develop- ment of case-mix-based funding models. Compared with the acute care sector, in rehabilitation there tends to be a smaller number of cases accumulating a relatively larger number of bed days and the degree of severity and resource use within any one diagnostic group may be greater. 3 Case-mix-based funding models also have the potential to affect access to rehabilitation by providing financial incentives for admitting patients who are more likely to be profitable, rather than those who may receive significant benefits from the rehabilitation process. 4,5 In 2001, the Casemix and Rehabilitation Funding Tree (CRAFT) model was implemented in Victoria. CRAFT has 2 classifications for stroke, split on the Modified Barthel Index score (15-item version). 6 Payment is based on the average length of stay (LOS) for the class, with short stay cases having a higher per diem rate and longer stay cases having a lower per diem rate. There is currently no cap on the per diem payments. The funding model is designed to provide an incentive to enhance efficiency while allowing some variability in resource allocation so that rehabilitation units can meet the requirements of patients without incurring unacceptable levels of financial risk. Before CRAFT was introduced, shadow funding was implemented for 1 year, during which units were funded ac- cording to CRAFT, with top-up payments to match historical funding, if required. The introduction of CRAFT caused a level of concern among clinicians. The patients believed to be most at risk of adverse outcomes were those with severe stroke. There is a potential for these patients to have less access to rehabilitation and/or have less successful outcomes because of pressures for shorter LOS. Therefore, our purpose in this study was to compare resource use and outcomes for rehabilitation of severe stroke in the year before CRAFT was implemented, the year of shadow funding, and the year of implementation. We also examined the variability in resource use in those 3 years and the relationship between resource use and functional gain. We then compared the results of this data set with previously published national and international studies. METHODS Participants Eight of the 25 designated rehabilitation services in Victoria provided prospective data for the 3 years. Seven centers were located in Melbourne, Australia, with representation from all the metropolitan health regions. One regional center partici- From the Physiotherapy Department, St. Vincent’s Health, Melbourne, Victoria Pde, Fitzroy, Australia (Brock); Allied Health and Community Programs, St. Vin- cent’s Health, Melbourne, Australia (Vale); and ORYGEN Youth Health, Department of Psychiatry, University of Melbourne, Carlton, Australia (Cotton). Presented to the Joint Conference of the National Neurology and Gerontology Groups of the Australian Physiotherapy Association, November 17, 2005, Melbourne, Australia, and the 14th Annual Scientific Meeting of the Australasian Faculty of Rehabilitation Medicine, May 4, 2006, Cairns, Australia. No commercial party having a direct financial interest in the results of the research supporting this article has or will confer a benefit upon the author(s) or upon any organization with which the author(s) is/are associated. Correspondence to Kim A. Brock, PhD, Physiotherapy Dept, St. Vincent’s Health, Melbourne, Victoria Pde, Fitzroy, 3065, Australia, e-mail: Kim.Brock@svhm.org.au. Reprints are not available from the author. 0003-9993/07/8807-11130$32.00/0 doi:10.1016/j.apmr.2007.04.001 827 Arch Phys Med Rehabil Vol 88, July 2007